>> this week on the journal editorial report. president obama's green agenda, promised to make climate change a priority in his second term and why it may end up costing you big. and phil mickelson, pro golfer, says that high taxes may drive him out of california. we've got discussisuggestions w should consider if he moves. and hillary clinton, her legacy as she prepares to leave washington at least for now. now. >> we will respond to the threat of climate change, knowing the failure to do so would betray our children and

future generations. >> paul: welcome to the journal editorial report, i'm paul gigot. that was president obama in his inaugural address monday, promising to make global warming a top priority in a second term, it's an issue that is sure to bring some fierce policy showdowns, the first of which may come under the keystone xl pipeline since 2008. and a revised route through nebraska this week, the final hurdle to the project at the state level and 53 senators, including 9 democrats sent a letter to the white house on wednesday urging president obama to expedite its approval. and joining the panel this week, wall street journal assistant page editor, james freeman and senior economics writer steve moore and washington columnist kim strassel. kim, where did that come from? i don't remember the climate change being something that the president talked a lot about in the campaign if at

all. >> surprise. >> paul: and he didn't wait for the state of the union, it's in the inaugural address. so, what's going on here politically? >> well, i think some of us did think it was coming. remember, this was a high priority of his back in 2008 when he campaigned. but they got beat up on it, they lost that fight in 2009 so he they decided to put it aside and not talk about it in the election and here we are, back with his promise and what was more interesting, too, not only did he make that promise, but you had somebody like barbara boxer, whose the senator from california, big climate person, she gave some details, too, how they intend to pursue this, normally through the epa for a carbon regulation program and thinking of putting in place a carbon tax. >> paul: oh, well, we'll talk a little about that. steve, so is this really a regulatory agenda? i don't think that cap and trade, the old program can pass even a democratic senate. it couldn't the first time

when they controlled everything. >> yeah, there's a reason that president obama almost never mentioned the words climate change and cap and trade during the the campaign, paul, because they're political losers, they're big tax increases on workers, on union workers, on manufacturing workers, and so, the democrats have avoided that issue now that they've won this election, they've sort of sprung it on people and i don't believe the votes are there in the united states senate or the house to pass anything like the carbon tax, or the democrats are talking an energy tax, like a gasoline tax, kim is right. if they're going to do this, through the regulatory angle and outlaw in that way. >> paul: but then, james, why mention it so prominently, or was this sort after bait and switch for the environmentalists and mention it and in policy terms don't. >> there may be some bait and

switch, but this is key. if he doesn't need to get anything through the congress, like the potomac swatch-- >> kim strassel. >> so well. they think that they have a court decision a few years empowers them to regulate carbon. they think they're off to the races here and this suggests to me that maybe the play is, with all of the business community expecting an approval of the keystone pipeline, the president might approve the pipeline, but then really ratchet down on the use of the oil going through that pipeline and i think he might be able to say to environmentalists. >> paul: how would they do that, they won't build this thing if they don't think there's a lot of oil that go through it. >> certainly the people that want that oil are expecting a big market, but if he's at the end of that pipeline, once it goes out into the economy, if the president is severely restricting how it's used, how it's used in transportation, and in manufacturing, as smart

b -- senator boxer had said he could say look, the end user is going to get hit hard and he reduce energy consumption and provides the construction jobs for the pipeline. >> can i make a related point here, paul, about the pipeline and carbon change. it's interesting if you really care about global warming and you want to reduce carbon emission, there is no question the most important thing america can do would be to transition towards natural gas, a huge abundance of. it is cheap, it is abundant in the united states and it does not emit many carbons into the atmosphere and yet, the left is against that, too, and yet we need pipelines to get the natural gas to the markets. >> that's because the natural gas would take the place of coal which is a much bigger carbon in terms of electricity. and energy. and is that what he's talking about maybe get keystone going and allow fracking to go ahead

and a tax, potentially a huge revenue raiser, but if you start small on it, you raise a lot of of money, but over time, you can ratchet that thing up. >> yeah, assume that's the win-win play for the president. because look, what he's got to balance here is making his environmental left happy, which he did by putting out the comment that they're going to address the climate threat, but he's sitting on top of this huge new boom in natural gas and oil and we saw in the election that he wanted to take some credit for at that. so, one way you could potentially do both of these things, do you green light some of the natural gas and oil projects and on the other end try it get an energy tax or something that makes it look as though they're ratcheting down on use and you get the bonus of a huge new revenue stream for the country, if you're a democrat. >> paul: are republicans going to go along with this? are they going to buy an energy tax if the president pushes it?

>> oh, hell no. i don't think it gets any republican votes and look, you know, the president talks, he's going it talk state of the union, we need more investment, we need more infrastructure in this country and here we've got an infrastructure project, it doesn't cost the government virtually a dime, it's private sector money and yet, they're upholding it and it doesn't make sense. >> paul: still ahead, pro golfer phil mickelson under fire after suggesting he may leave california for a more tax friendly local. some states he might want to consider when we come back. e.. little did i know that one week later i wasn't smoking. [ male announcer ] along with support, chantix is proven to help people quit smoking. it reduces the urge to smoke. some people had changes in behavior, thinking or mood, hostility, agitation, depressed mood and suicidal thoughts or actions while taking or after stopping chantix. if you notice any of these stop taking chantix and call your doctor right away. tell your doctor about any history of depression

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>> pro golfer phil mickelson caused a stir last weekend for suggesting he may leave his home state of california in search of friendlier tax climbs. and bothers there passed proposition 30 making california the state with the highest marginal tax rate in

the country and add that to what mickelson will pay uncle sam after the fiscal cliff tax increase and it's not hard to see why he may be shopping for a new place to live. james and kim strassel are back and with states he may want to consider and phil mickelson did the mea culpa and said i shouldn't get involved in tax talks and probably hurt his brand, but where should he move if he and the family decide to move? >> he may have more options, and more states consider getting rid of their income taxes, but the place tore golfers, for athletes in general is florida. it has no income tax, and obviously golf weather almost the entire year and sometimes the whole year depending where you live in florida. >> paul: no state tax. >> a-rod put his house on the market. and if phil is shopping. >> alex rodriguez. >> the new york yankees-- >> and there's another a-rod who is more important.

and anyway, texas, nevada, if he wants to go to vegas, a lot of golf courses there. so, i think this is -- this is bigger than phil mickelson is the problem california is having, kicked the rate to 13.3%, a lot of people are looking elsewhere. >> paul: steve, there's a lot of tax action in the states, tax reform, that's pretty interesting. a lot of governors trying to even eliminate the income tax, louisiana, kansas, nebraska, tell us what's going on and why? >> a great story and by the way, james, 63 of the great golf score, but it ain't so good as a tax rate and that's what phil mickelson states, and the big story here, a lot of states have been looking at what's happening in places like texas and in places like tennessee, i'm in nashville, tennessee, today it's boomtown, usa. states that have no income tax and the evidence is irrefutable that businesses

and capital and families are moving out of those high tax states like where you live in new york and moving to these no tax states. he so you've got a number of places like north carolina, like arkansas, like kansas and oklahoma and the south and southwest, that say, you know, we don't want to be like california we want to be like texas and they're looking at eliminating their income tax. >> paul: okay, steve, but what about the revenue losses? that will be the big complaint if you give that up you're going to lose revenue. how do you make it it up? >> a great question, a lot of states say we'll expand and maybe increase sales tax and that's been a political hazard if it hasn't worked well in places that tried that. i want to toss out another idea that some states are looking at. why not use this bonanza of money from the energy revolution we talked about a little bit earlier and use some of that money in terms of severance taxes to raise and royalties and use that to replace the income tax. that's how wyoming and alaska got rid of their income tax. >> paul: and you say the swap

from income to sales tax doesn't work, you mean politically. >> politically. >> paul: economically it makes sense because you're taxing consumption instead of investment and work and effort. >> thank you for clarifying that, it's an important point. what i was saying, sometimes it's a hard sell to the people saying when you go to the 7-eleven or to the grocery store might have to pay a higher tax. and people saying maybe i'll take the devil i know, income tax, over the devil i don't know. the higher sales taxes. >> paul: and meanwhile, kim movement in the opposite direction in the states that are controlled by democrats, and massachusetts governor patrick, proposing a big tax increase and something similar in minnesota and follows california, illinois, new york, maryland, virginia under mark warner and connecticut, a lot of so-called blue states which raised taxes substantially in the last couple of years. >> the remarkable thing about tpaul, the evidence is there about what a disastrous policy

this is. you know, you have the example of phil mickelson saying that he would like to look at a new place to live and we actually have the numbers showing that this is exactly what happens when you do raise, you know, maryland raised its taxes on millionaires as they called it and you know, the next tax year, most of those higher income job creators in the state had fled for others. and probably some of the states we're talking about looking to in fact decrease income taxes. so it's the wrong direction, but these states feel as though they're under enormous bugetary pressures and the way to keep spending is just tax more. >> paul: is this somebody that would give somebody like louisiana governor bobby jindal, sometimes mentioned as a presidential candidate, some carry if he decide today run. >> absolutely, absolutely and some of the reform governors because the reformers of a couple of years ago chris christie in my beloved adopted home state of new jersey has backed off the tax he reform

issue. the problem is, new jersey still has high, almost 9% rate and it's not going to help him. i think to the extent that bobby jindal comes in, he's proposing reforms on the tax side could become a name on the republican side. >> paul: it's almost like the red states, you know, the republican states in the south, they're practicing raieagan omices and the blue states obamanomics, the great thing about america, we'll see and the experiment of which states will prosper and i'm going to put my money on the south. >> and massachusetts is exploding health care costs. >> that's right. >> paul: when we come back, hillary clinton's swan song as she prepares to leave washington. a look at her final performance and her future in politics. with hand-layered pasta, tomatoes, and real mozzarella cheese. but what makes us even prouder...

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>> the fact is, we have four dead americans, was it because of a protest or was it because of guys out for a walk one night and decided they'd go kill some americans? what difference at this point does it make? >> an oscar caliber performance from outgoing secretary of state hillary clinton this week as she testified on capitol hill about the september 11th attack in benghazi that killed u.s. ambassador chris stevens and three other americans. and wall street editor matt comiskey joins us and first let's answer the secretary's question, what difference does it make. >> and the question, why were we misled who was responsible for the death of the ambassador and three others,

the first ambassador killing in decades tan the fact mislead-- they didn't mislead, a story out there, the story. >> the youtube video. does it matter that this was, now we know almost certainly, an organized terrorist attack. >> of course it does, that speaks to the tactful-- fact that we failed in libya and we saw the islamist militias. >> and we didn't want to play a role. we subcontracted. >> yeah, and in qatar, we don't want to be involved, after the war stepped out and the same in mali and afghanistan now we're pulling out and iraq we've totally pulled out so the question of accountability. she did a very good job to give her credit, secretary clinton credit, any major damage to her own political

chances, but the question is unanswered and should be answered. >> one of those questions why we have that lightfoot print and we we didn't anticipate that attack and why the united states wanted to wash its hands of libya? >> exactly, those questions, those other questions what, did president obama do that day? what options were being considered to try and help the compound in benghazi and the cia annex next door in the city? you know, why were there safety plans in place to help americans in case something happened in a war zone. >> paul: matt, i have the impression that most of the republicans, with the exception of ron johnson and marco rubio, weren't prepared for this hearing. they didn't dig hard, didn't ask good questions. john mccain gave a speech and. >> right. >> paul: he's got authority and rand paul gave a speech, but nobody really dug in to answer those questions and that's one of the reasons she emerged, i think, with

unscathed. >> exactly and the democrats have the time sort of said hillary clinton looking toward 2016 where she'll probably run. >> paul: well, no question about that, i think she will. that doesn't bode well at all for the chuck hagel hearings, republicans talking they'll give him a tough time as a nom fee for defense secretary. >> what they really failed to do here, paul, not just have a response or press her on the big things and move her off the talking points on the questions that you just asked, but also that bigger question about putting and placing benghazi within the scope of a broader failure of foreign policy. and that's going to have to be what they're going to do if they're going to talk about chuck hagel. highlight the obama failure in this area and that chuck hagel is going to be a yes man for that strategy. if they're not able to do that in a hearing like this, they've been pressing for for months, it does not bowed wede

for her-- >> and what about her state and benghazi now a negative concerns and arms control deal with russia, you were not enamored of, i recall. overall, what's her legacy? >> she's one of the most traveled secretary of state and diplomacy to her credit well. and sort of a famous figure who went to many countries. in terms of her influence on obama policy or much of any sort of achievements, it's impossible to me to point to anything and what's more remarkable about the hearings, that she sounded very hawkish and america must lead in north afri africa, we must halt the spreading-- >> you can't have a vacuum, but that's the policy that the administration has been

following. >> and she's still in it. >> that's a preview of 2016, all right? we have to take one more break. when we come back our hits and misses of the week. when you have diabetes... your doctor will say get smart about your weight. i tried weight loss plans... but their shakes aren't always made for people with diabetes. that's why there's glucerna hunger smart shakes. they have carb steady, with carbs that digest slowly to help minimize blood sugar spikes. and they have six grams of sugars. with fifteen grams of protein to help manage hunger... look who's getting smart about her weight. [ male announcer ] glucerna hunger smart. a smart way to help manage hunger and diabetes. and it gave me my custom number. my arches needed more support until i got my number at the free dr. scholl's foot mapping center. i'm a believer! and you will be too! learn where to find your number at drscholls.com.

>> time now for hits and misses of the week. matt first. >> well, a hit it to british prime minister to david cameron, wednesday, gave a noteworthy speech on the european union. he said that europe must reform and must bring back its internal market and the free market to the core of what it does and he will put membership in the european union up to referendum after the next election, europe needs democratic legitimacy and he needs to be reconfirmed by the voters. it's a smart, but risky move for cameron. >> paul: james. >> another hit for cameron, cam cameron, not the british prime minister, but he's with

the baltimore ravens and he's rooting for the team and he says it was a brilliant move firing him. he's not saying he was a terrible coach, but shook up the team and helped to play better, but in super charged sports egos, refreshing to say, i should say this is not applicable to media news rooms, not a brilliant move to shake up your staff here, i'm saying in general. >> paul: that's all right, with his case, you're our defensive coordinator don't worry about it. kim? >> a hit to the the news that so many americans are finally being given a choice it not join a union. the evidence for that came with news department of labor statistics, union membership had again dropped and at a post world war ii law and fleeing from indiana and wisconsin, and allowing them to negotiate on their own and not paying union dues with which they don't agree and freedom in any context is good

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